1 Summary of Meeting with the Engi ne Manufacturers Association (EMA) Regarding the Proposed Statio nary Existing RICE NESHAP June 22, 2009

Attendees

Penny Lassiter, EPA Brady Winkleman, Caterpillar Bob Wayland, EPA Gordon Gerb er, Caterpillar (by phone) Melanie King, EPA Jack Gehring, Caterpillar (by phone) Jaime Pagán, EPA Bob Stachowicz, Waukesha (by phone) Michael Horowitz, EPA (by phone) John Peffer, Waukesha (by phone) Tanya Parise, AGTI (by phone) Mi ke Brand, Cummins (by phone) Joe Suchecki, EMA Chris Armbruster, Cummins (by phone) Tim French, EMA Adoley Azu, Cummins (by phone) Johan Boij, Wartsila (by phone) Christine Ueno, MTU (by phone)

Purpose of Meeting

The purpose of this meeting was to di scuss the proposed national emission standards for hazardous air po llutants (NESHAP) for existing stationary reciprocating internal combustion engines (RICE). The proposed NESHAP for existing stationary RICE was published in the Federal Re gister on March 5, 2009 (74 FR 9698).

Summary of Meeting

General

The Engine Manufacturers Association (E MA) requested this meeting with EPA to discuss the recently proposed NESHAP for stationary engines. EMA has previously worked with EPA on other rulemakings aff ecting stationary engines and wanted to address its specific concerns regarding this proposal. An agenda was provided by EMA

and is included as A ttachment 1 to this meeting summar y. The summary of this meeting

will be available in the docket for this rulemaking (Docket ID No. EPA-HQ-OAR-2008- 0708).

EMA indicated that it primarily wanted to discuss the recently proposed rule for existing stationary engines and the comments EMA submitted, but that there are still some outstanding issues on the compre ssion ignition (CI) new source performance standards (NSPS) that it al so wished to touch on.

Specific Issues

The main issues that EMA discussed duri ng the meeting are shown in the attached agenda. Further details on these issues can be found in EMA’s comments on the proposed rule, which are available from the rulemaking docket as Document ID Number EPA-HQ-OAR-2008-0708-0096.2 1. SSM Limits

The proposed startup, shutdown, and malf unction (SSM) limits are an area of great concern to EMA. The limits during SSM periods are based on the best performing engines without aftertreatment controls, whic h is a false premise, according to EMA. The standards are not feasible during startup periods, plus there is no definition for what constitutes a startup, EMA said. In addition, there are no feasible test procedures and there is no emissions data for engines duri ng startup. Therefore, EPA cannot have an enforceable standard, in EMA’s opinion. EMA noted that under section 112(h) of the Clean Air Act, EPA can rely on work practi ce standards (e.g., EPA could limit the startup time and include work practice st andards) if it is technically infeasible to set a standard and it is impossible to measure the standard. EP A said that it recognizes the issues that EMA and others have brought up and that it ack nowledges that there are aspects that will

need to be addressed and resolved for the final rule. EPA indicated that it would be receptive to different ideas to consider for the final rule.

2. Standards for Emergency Engines

EMA expressed that it is not reasonab le to put add-on controls on emergency engines and that there is no other way to alter the emissi ons from existing stationary emergency engines. Based on how the ma ximum achievable control technology (MACT) floor is set, i.e., based on the top 12 percent, means that 88 percent of the sources will not

be able to meet the standards. EMA i ndicated that it thought that many emergency engines might need to be replaced as a result of EPA’s standards. EPA asked if the proposed standards were way off, but EMA re sponded that no matter what the numerical limit is, the fact is that 88 percent of engines wi ll not be able to meet the standards. Other than aftertreatment, there is nothing that ca n be done for these engines and EMA added that Congress probably did not intend to regu late standby engines. EMA also pointed out

that there is small net environmental be nefit in regulating emergency engines.

3. Covering all Engine Sizes

EMA is concerned that EPA’ s proposal is covering all si ze engines, particularly considering that smaller size engines coul d be home owned, which means it would be impractical to require anything from thes e engines, according to EMA. In EMA’s opinion, an exemption is necessary for these engines. Similar arguments that EMA had for emergency engines apply to small engines.

4. Formaldehyde Standards

The proposed formaldehyde standards are problematic because of the limited availability of viable and cost effectiv e measurement methods and EMA recommended that EPA consider finalizing the standards in terms of vol atile organic compounds (VOC) instead of formaldehyde.

5. Regulatory Charts3 EMA discussed various issues related to sp ecific proposed standards. The issues

were summarized in charts that are ava ilable from EMA’s public comments (see pages 13, 15, 17 and 21 of Document ID Nu mber EPA-HQ-OAR-2008-0708-0096) and are discussed in EMA’s comments. Only a brief su mmary of the main issues is provided in the below bulleted points:

• There is nothing reasonable an owner/ operator can do to change the emissions from emergency CI engines in order to meet the limits.

• Engines fueled by landfill and digester ga s cannot use aftertreatment controls and the only option is to rebuild the engine s at a high cost. Also, EPA did not consider fuel variability.

• The 2 parts per million (ppm) formaldehyde limit that was proposed for CI engines less than 50 horsepower (HP) is difficult to measure under lab conditions and nearly impossible to measure in th e field. In addition, testing is very expensive and could exceed the cost of running the engine for a year.

• For CI engines at area sources, it is re commended that EPA adopt work practices in the form of having owners/ope rators follow engine manufacturers

recommendations instead.

• The 200 parts per billion formaldehyde standa rd that applies to certain rich burn engines is infeasible to measure and it is recommended that VOC is used instead of formaldehyde.

• It is unreasonable to require 2 ppm form aldehyde for engines at area sources and no limit on engines at major sources great er than 500 HP. Area sources should not be more heavily regulated than major sources.

Regarding EMA’s last point, EPA indicated th at it did not revisit the requirements for engines greater than 500 HP at major sources that were pr omulgated in 2004. Under the residual risk program that follows 8 years after a standard is finalized, EPA will again look at major sources.

6. Existing Standards vs. New Standards

EMA pointed out that there are some sta ndards for existing engi nes that are more stringent than standards that apply for new e ngines and asked EPA if this is an issue. EPA indicated that the NSPS pr ogram is different than the MACT program, in that for example the MACT program allows less flex ibility. The MACT program confines EPA to look at the best performing 12 percent of sources. EPA acknowle dged that it has little data and that the lack of data may lead to more stringent floors. EPA is interested in getting data from industry in order to supplement the data that it has. 7. >30 Liters/Cylinder Engines4 It is necessary to separate stationary diesel engines that are greater than 30 liters per cylinder from other diesel engines in th e rule, in EMA’s opinion. EMA pointed out

that it has met with EPA several times on this issue and sent several letters. It is necessary to level the playing field for these e ngines. A definition fo r installation is also

needed. EMA said that the timeframe associat ed with the American Petroleum Institute’s (API) settlement is too long ( potentially 1 year to proposal ). EPA indicated that the 113(g) notice has gone out and that EPA is going to start working on API and EMA issues, but that an earlier sc hedule is probabl y not likely.

Wrap-Up

EPA indicated that it needs to review all the comments received on the proposal

and determine what latitude it has in moving forward. Absent of receiving new data, it will be difficult to avoid a final rule that has the same approach as the proposal, EPA said. EMA was curious if EPA planned on re creating a database. EPA indicated that doing so is not likely, but that it may fold in some new data if such data is received and added that it has been asking industry for a long time for new emissions data. Waukesha indicated that it would be happy to provide da ta and would like to work with EPA to find out what specific data is needed. EMA added that if there are data gaps, it could try to

fill some of those holes.

In EMA’s opinion, the proposed rule is di fficult to follow and it is unclear what a source is supposed to comply with due to severa l inconsistencies, referrals to other rules, and so on. EMA also thought that there had no t been much industry involvement for this rulemaking.

EMA asked if there is any considerati on to changing the promulgation date. EPA indicated that a delay on fina lizing the rule for gas engines has been requested by several parties.5 Attachment 1



### EMA/EPA Meeting Research Triangle Park, NC June 22, 2009

Stationary Engine Issues Agenda

I. Introductions

II. RICE NESHAP Issues, New and Existing Engines (20 minutes)

A. Overview of EMA Comments (copy attached) and Key Issues

B. Start-Up/Malfunction Emissions and proposed controls

C. Alternative to Formaldehyde Standard for 4SRB Engines

D. Inconsistent and Infeasible Standards

III. Resolution of RICE NES HAP Issues (40 minutes)

A. Overview of EMA Develope d Regulatory Diagrams

B. EMA Recommendations on High Priority Issues

C. EPA Response to High Priority Issues

IV. Outstanding CI NSPS Issues and >30-l/cyl Engines (15 minutes)

A. History of EMA requests

B. Issues Needing Resolution

C. API Settlement and Proposed Regulation

V. Regulatory Process Discussion for Stationary Engines (30 minutes)

A. Need for New EPA – Industry Process

B. Example: OTAQ Regulatory Process

C. EMA Recommendations and Support for Change

D. Potential Paths Forward

VI. Summary and Follow-up Actions (15 minutes)